Estate planning involves helping your family plan for life without you. If you own a business, you also need to plan for business life without you.
Doing so will be crucial to ensure your family continues to benefit from the hard work you put in. It also protects your loyal employees and customers. Things cannot grind to a halt the day you die.
- Who will take over?
Your first thought might be to leave your business to your kids to run. That can work well, but what if your children have no interest in following in your footsteps? Or what if you pass away before they are old enough to take the helm?
You can adapt your plan with time, so if your kids are still young, your first succession plan may involve a trusted colleague running the company on their behalf. As they leave school, you may adapt your strategy to give the kids the training and experience they need to run things themselves.
- What is the best way to transfer ownership?
Transferring ownership when you die is not always the best option. Sometimes there are tax advantages to doing it partly or wholly while still alive.
- What if I suffer a temporary blip?
Much like estate planning, business succession planning is not all about the endgame. It should also cover what happens if you are temporarily unable to run the company due to illness or injury. We are not talking about a few days off sick with the flu here. More something that leaves you unable to make sound decisions or sign checks or documents.
A business will form a vital part of your estate, so get help to take care of it when creating your overall estate plan.